The residential segment continued to reel under the pressure of inventory overhang resulting in moderation in number of new project launches as focus remained on delivering existing projects. Sales momentum picked up after the second quarter due to the promotional offers during the festive season.

The commercial segment witnessed progressive growth with multiple deals taking place during the year. Bandra Kurla Complex (BKC), one of Mumbai's known CBDs, continued to be the preferred location for all MNCs entering India or looking to shift to bigger setup. There is visible enhancement in number of space requirements being floated with majority of them coming in from the Fortune 500 clients. All in all, the year saw significant turnaround for commercial profile and gradual progress in residential forming a good foundation for coming years.

REITS

REITs once introduced will be attractive to the investors who are looking for consistent &strong income-generating investments and are ones who are reluctant to invest in the uncertain markets. But there is still lot of clarifications needed from Finance Ministry. With regards to the developers, REITs would lead to creation of avenues for enhanced liquidity, improvement in the property market transparency and potentially lowering the cost of capital. REITs could soon become a reality as the Government is trying to introduce reforms, keeping in mind the global practices. The sooner the better will be for the country to attract global capital towards India.

Status of approvals against 2015

The Government has shown adequate support by bringing in reforms in policies and creating online windows for submission but all departments like CFO/HRC/MCGM are not synced in to create a Single Window System for approvals. Implementation of these initiatives needs to be swifter, so far there has only been a marginal dip in the number of approvals to be taken as compared to 2015. These initiatives will help to bring down the cost of projects, ensure timely delivery which in turn would be beneficial for the buyers and meet the actual objective of RERA.

Sales and New Projects

Trusted and reputed developers have witnessed relatively better sales in mid-income & affordable housing segments. However, the bleak economic and dynamic regulatory environment has forced us to adopt cautious approach towards fresh acquisitions. With exceptional gains from information asymmetry becoming a thing of the past, margins can only be maintained through an agile and dynamic set-up.

Price Correction

Although, prices have been stable for the most of the year, there was slight correction in prices during the festive season. With interest and home loans rates expected to decrease, the sector should stabilize as we enter into the New Year.

Outlook on 2017

In 2017, the expectation of the buyers and developers ought to rise as the sector has witnessed lots of new government policies. These policies will help the industry to be more organized and will provide a boost to both the residential as well as commercial real estate segments.

Demonetization has sentimental impact, with money coming in the banking system home loans to mid income will be easily accessible and at cheaper rate. Developers should focus to complete the existing project, sales will happen as the buyer gets to see development and project reach close to completion stage.

The RERA act will strengthen the association between a buyer and a developer immensely. The act will consist of a registration mandate, and strong penalties will ensure that the home buyers feel secure about their investments and further enhance the residential sales. It will play a significant role of a supervising authority for any land or home deal that takes place. The above policies initiated by the Government will help propel the growth of the organized real estate sector going forward.

Currently, the Goods and Services Tax (GST) is levied at 12 per cent on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.